Operation management 6e by russel and taylor ch01

Chapter Introduction to Operations and Supply Chain Management Operations Operations Management Management 66thth Edition Edition Roberta Russell & Bernard W Taylor, III Copyright 2009 John Wiley & Sons, Inc Beni Asllani University of Tennessee at Chattanooga Lecture Outline  What Operations and Supply Chain Managers Do  Operations Function  Evolution of Operations and Supply Chain Management  Globalization and Competitiveness  Operations  Strategy and Organization of the Text  Learning Objectives for This Course Copyright 2009 John Wiley & Sons, In 1-2 What Operations and Supply Chain Managers Do  What is Operations Management?  design, operation, and improvement of productive systems  What is Operations?  a function or system that transforms inputs into outputs of greater value  What is a Transformation Process?   a series of activities along a value chain extending from supplier to customer activities that not add value are superfluous and should be eliminated Copyright 2009 John Wiley & Sons, In 1-3 Transformation Process  Physical: as in manufacturing operations  Locational: as in transportation or warehouse operations  Exchange: as in retail operations  Physiological: as in health care  Psychological: as in entertainment  Informational: as in communication Copyright 2009 John Wiley & Sons, In 1-4 Operations as a Transformation Process INPUT •Material •Machines •Labor •Management •Capital TRANSFORMATION PROCESS OUTPUT •Goods •Services Feedback & Requirements Copyright 2009 John Wiley & Sons, In 1-5 Operations Function  Operations  Marketing  Finance and Accounting  Human Resources  Outside Suppliers Copyright 2009 John Wiley & Sons, In 1-6 How is Operations Relevant to my Major?  “As an auditor you must  Accounting understand the fundamentals of operations management.”  “IT is a tool, and there’s no better  Information place to apply it than in Technology operations.”  “We use so many things you  Management learn in an operations class— scheduling, lean production, theory of constraints, and tons of quality tools.” Copyright 2009 John Wiley & Sons, In 1-7 How is Operations Relevant to my Major? (cont.)  Economics  Marketing  Finance  “It’s all about processes I live by flowcharts and Pareto analysis.”  “How can you a good job marketing a product if you’re unsure of its quality or delivery status?”  “Most of our capital budgeting requests are from operations, and most of our cost savings, too.” Copyright 2009 John Wiley & Sons, In 1-8 Evolution of Operations and Supply Chain Management  Craft production  process of handcrafting products or services for individual customers  Division of labor  dividing a job into a series of small tasks each performed by a different worker  Interchangeable parts  standardization of parts initially as replacement parts; enabled mass production Copyright 2009 John Wiley & Sons, In 1-9 Evolution of Operations and Supply Chain Management (cont.)  Scientific management  systematic analysis of work methods  Mass production  high-volume production of a standardized product for a mass market  Lean production  adaptation of mass production that prizes quality and flexibility Copyright 2009 John Wiley & Sons, In 1-10 Positioning the Firm     Cost Speed Quality Flexibility Copyright 2009 John Wiley & Sons, In 1-28 Positioning the Firm: Cost  Waste elimination  relentlessly pursuing the removal of all waste  Examination of cost structure  looking at the entire cost structure for reduction potential  Lean production  providing low costs through disciplined operations Copyright 2009 John Wiley & Sons, In 1-29 Positioning the Firm: Speed  fast moves, fast adaptations, tight linkages  Internet  conditioned customers to expect immediate responses  Service organizations  always competed on speed (McDonald’s, LensCrafters, and Federal Express)  Manufacturers  time-based competition: build-to-order production and efficient supply chains  Fashion industry  two-week design-to-rack lead time of Spanish retailer, Zara Copyright 2009 John Wiley & Sons, In 1-30 Positioning the Firm: Quality  Minimizing defect rates or conforming to design specifications; please the customer  Ritz-Carlton - one customer at a time     Service system is designed to “move heaven and earth” to satisfy customer Every employee is empowered to satisfy a guest’s wish Teams at all levels set objectives and devise quality action plans Each hotel has a quality leader Copyright 2009 John Wiley & Sons, In 1-31 Positioning the Firm: Flexibility  ability to adjust to changes in product mix, production volume, or design  National Bicycle Industrial Company    offers 11,231,862 variations delivers within two weeks at costs only 10% above standard models mass customization: the mass production of customized parts Copyright 2009 John Wiley & Sons, In 1-32 Policy Deployment  Policy deployment  translates corporate strategy into measurable objectives  Hoshins  action plans generated from the policy deployment process Copyright 2009 John Wiley & Sons, In 1-33 Policy Deployment Derivation of an Action Plan Using Policy Deployment Copyright 2009 John Wiley & Sons, In 1-34 Balanced Scorecard  Balanced scorecard  measuring more than financial performance     finances customers processes learning and growing  Key performance indicators  a set of measures that help managers evaluate performance in critical areas Copyright 2009 John Wiley & Sons, In 1-35 Balanced Scorecard Balanced Scorecard Worksheet Copyright 2009 John Wiley & Sons, In 1-36 Balanced Scorecard Radar Chart Copyright 2009 John Wiley & Sons, In Dashboard 1-37 Operations Strategy Services Process and Technology Products Capacity Facilities Human Resources Sourcing Quality Operating Systems Copyright 2009 John Wiley & Sons, In 1-38 Organization of This Text: Part I – Operations Management  Intro to Operations and Supply Chain Management:  Quality Management:  Statistical Quality Control:  Product Design:  Service Design:  Processes and Technology:  Facilities:  Human Resources:  Project Management: Chapter Chapter Chapter Chapter Chapter Chapter Chapter Chapter Chapter Copyright 2009 John Wiley & Sons, In 1-39 Organization of This Text: Part II – Supply Chain Management  Supply Chain Strategy and Design: Chapter 10  Global Supply Chain Procurement and Distribution: Chapter 11  Forecasting: Chapter 12  Inventory Management: Chapter 13  Sales and Operations Planning: Chapter 14  Resource Planning: Chapter 15  Lean Systems: Chapter 16  Scheduling: Chapter 17 Copyright 2009 John Wiley & Sons, In 1-40 Learning Objectives of this Course  Gain an appreciation of strategic importance of operations and supply chain management in a global business environment  Understand how operations relates to other business functions  Develop a working knowledge of concepts and methods related to designing and managing operations and supply chains  Develop a skill set for quality and process improvement Copyright 2009 John Wiley & Sons, In 1-41 Copyright 2009 J ohn Wiley & Sons, Inc All rights reserved Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful Request for further information should be addressed to the Permission Department, J ohn Wiley & Sons, Inc The purchaser may make back-up copies for his/her own use only and not for distribution or resale The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information2009 herein Copyright John Wiley & Sons, In 1-42 ...  What Operations and Supply Chain Managers Do  Operations Function  Evolution of Operations and Supply Chain Management  Globalization and Competitiveness  Operations  Strategy and Organization... Google, and others Numerous countries and companies 1-14 Evolution of Operations and Supply Chain Management (cont.)  Supply chain management  management of the flow of information, products, and. .. Wiley & Sons, In 1-2 What Operations and Supply Chain Managers Do  What is Operations Management?  design, operation, and improvement of productive systems  What is Operations?  a function